Recovering Journalist

Ad Subtraction

How bad is it in the newspaper business? Go get a copy of your Sunday paper and count the ads. Go ahead. I'll wait. It probably won't take you very long.

Editorial types tend not to pay much attention to ads, even though they pay most of their salaries. But the stark problems facing newspapers are easily understood if you go through a paper and look at the advertising. If you can find it.

My Sunday newspaper is The Washington Post, long one of the most successful papers in the nation, by any measure. The Post rules the local advertising market (at one point, it was claimed, something like 80 percent of the ad dollars in the Washington market were spent on The Post), and commands high penetration among its audience (though not what it used to be), which should make it catnip for advertisers.

But those were the good old days. I was reading today's Post and suddenly found myself saying, "Um, where are the ads?" So I sat down and counted the ads in the paper's news sections. The results: Not good. 

Today's paper, by my count, has just over 14 pages of ads in 102 pages in its main news sections (A section, Metro, Business, Sports, Outlook, Style & Arts, Sunday Source, Travel and Book World). That's less than a 14 percent ratio of ads to news. Total number of display ads bigger than an a column inch or two? About 60 (a few classifieds-like directory pages help pad the overall ad total). Total full-page ads: Just three.

Most of the sections had fewer than a page of ads in them (the A section had the vast majority). Business, Sports and the Sunday Source "living" section didn't have a full page of ads between them—in 32 pages of newsprint. Yikes.

But wait, you say! It's a holiday weekend! Fair enough. So I went to the recycling pile and got last Sunday's paper. The results were better, but not much: Just under 18 pages of ads in 96 total pages, a 19.5 percent ratio. The other measures were proportionally similar to this week's paper.

That's not good, and it gets even scarier when you hear about publishers like Tribune Co. moving to tighten its papers to a 50-50 news/ad ratio. A ratio like that would have tightened today's Post to, gulp, 28 pages. It may not be that bad if classifieds sections, which have virtually no news content, are included in the ratio. But the Post's classifieds sections are flimsy these days, too. On Sundays, inserts and coupons help bulk up the advertising take, as well—but even those getting thinner.

These are hard times for newspapers, as has been well-documented. But it really hits home when you pick up a paper, count the ads, and find yourself wondering how much news space you'd have to cut to match the steep decline in advertising space. Or how long a business can go on without enough revenue to pay for producing its primary product.

The Yahoo Watch

The ongoing upheaval at Yahoo is one of the most interesting business/technology stories around. In the wake of the collapse of Microsoft's effort to take over the company, key executives are leaving in droves and Wall Street sharks are circling. Reaction to the company's travails range from dire to humorous to VC Fred Wilson's counterintuitive argument that this is a cleansing moment that's good for the company. (Nah.)

Watching Yahoo implode is more than a spectator sport for a lot of newspaper companies. Former Knight Ridder executive Hilary Schneider has built an impressive and still-growing consortium of newspaper partners to share content, advertising and technology. I've always thought these deals made more sense for Yahoo than the newspapers, but at least they're giving the papers access to leading Web technologies and and online advertising network that they'd have difficulty getting on their own.

But with Yahoo in disarray, can the members of its newspaper consortium still hope to get the benefits of the partnership, especially in badly needed online ad revenue? That's the question that newspaper analyst Ken Doctor is asking, and it's a good one–especially now that Yahoo has brought Google into the relationship.

Ken writes:

In old times, newspapers would find this all great sport. They'd cover it big as the fascinating business story that it is, and that would be the extent of their interest. Now, though, more than 40% of US dailies by circulation have hitched their 2009 growth wagons to Yahoo and its emerging AMP ad platform. AMP is the most important part of the newspaper's consortium's deal with Yahoo. 

<snip>

The depletion of Yahoo's staff, if accelerated, could slow down AMP development and implementation. We don't know what's going on inside Yahoo, but recent defections signal that lots of people might be taking their eye off the ball. 

Ken's analysis of the situation is well worth reading–and pondering. As if the newspaper industry didn't have enough problems...

Mapping Layoffs

The Graphic Designer blog has put together an interesting Google Maps mashup tracking newspaper layoffs around the country. This is the kind of interactive graphic that news Web sites should be doing to geographically track data and make it more interesting for readers.

But let's get some perspective. While it's great that somebody is tracking newspaper layoffs, the map counts fewer than 5,000 this year, across the industry. Losing jobs is never good, especially for those who are put through the economic hardship of losing them. But to be frank, 5,000 jobs are a drop in the bucket compared to the huge layoffs that regularly course through American industry. 

Airlines, automakers, retailers and others regularly--and unfortunately--lay off workers by the thousands. Most coverage of those cuts is perfunctory, at best. The numbers are dutifully chronicled, maybe a feature story is done on a couple of laid-off workers, and that's it. 

Where are the journalism organizations that map those layoffs--or cover them with a fraction of the column inches, pixels or time that are slavishly devoted to newspaper layoffs? (And I won't bring up the paper that shall remain nameless that posted on its Web site a mournful gallery of photos of empty desks in its newsroom following cutbacks amounting to a couple dozen people. How self-indulgent. I'll that paper has never run a similar tear-jerking feature about larger layoffs at employers it covers.)

I'm not trying to belittle newspaper layoffs. All layoffs are tragic. But news organizations should strive to cover layoffs of all types with the same sort of attention to detail that they give their own cuts. That goes for general newspaper industry coverage, as well. If the problems in other industries were being given the level of detailed coverage that newspapers are giving to navel-gazing about their own problems (which, to be truthful, are on a smaller scale than the problems facing many industries), there would be a lot of interested readers. Hell, it might even protect some newspaper jobs!

It's Still a Business

A lot of well-meaning journalism theorists and pundits have suggested that the optimal model for the future of newspapers is some sort of locally owned public trust, which theoretically would protect the paper from the vicissitudes of Wall Street and shareholders and their demand for such crass things as, say, profits. This, in turn, would allow the paper to operate above the coarseness of the business world, providing a shield for its journalism (and journalists) from those money-grubbing capitalists. What a romantic notion.

Exhibit A in this argument usually is the St. Petersburg Times, which is owned by the Poynter Institute, the journalism think-tank and training center.

Problem is, newspapers, no matter what their ownership structure, still are businesses. And in fact, the St. Pete Times, while ultimately owned by Poynter, also is a business, and its leaders are very open in saying that it must make a profit to survive. Not surprisingly--especially in the economically tough Florida market--the Times is having the same problems with declining audience and advertising that every other newspaper faces, regardless of ownership structure. 

So it's not surprising to find out that this alleged model for the future of the industry is handling the challenges the same way others newspapers are: with staff buyouts, salary cuts, and perhaps even layoffs.

So much for romantic notions of saving newspapers through some sort of profit-proof local public trust. Anybody got any other ideas?

NYT=API

This is very, very interesting.

The New York Times is planning to open up its content to anybody who wants to draw from it, mash it up, reuse it, etc. This is technology-think, not media-think, and every news organization should be thinking about the same thing (and there probably should be some cooperative work on setting standards for how the information should best be structured). News sites need to find new ways to distribute their content far and wide, and the Times' effort is a major step in that direction.

Advertising 2.0. Please.

Great post: Scott Karp in Publishing 2.0 on why traditional advertising formats don't work online. I touched on this a year or so ago, but Karp does a great job of indicting the banner ad as a legacy of a bygone era and pointing out that Google's Web advertising success has come through a vehicle (contextual advertising) that's truly a Web product, not a re-pasted print ad.

Money quote:

Traditional advertising formats FAIL on the web. By traditional advertising formats, I mean display ads, video ads, and any other ad whose format and value proposition approximates or imitates that of an offline advertising format.

Exactly right. There's a crying need for advertisers (and the media companies that enable them) to try to do more than replicate display ads on the Web, and to understand that tools like context, search, social media, pay-per-click, etc., are available to the Web advertiser. This is a big reason why traditional media sites have hit the wall on revenue--and why Google is lapping the field.

As Karp says:

We need to invent new forms of advertising on the web. But it’s more than that. ... Online advertising must create value for users or it will create little or no value for advertisers. This would seem self-evident, but it has not been the case with traditional advertising, which was developed for CAPTIVE audiences, and web users are increasingly anything but captive.

Off the Cliff

If you haven't seen them, Editor & Publisher has the latest Newspaper Association of America numbers on newspaper ad revenue, and they're pretty heinous: Down a total of 9.4 percent in 2007, with Classifieds down a whopping 16.5 percent. And most of that happened before the economy started going south. Compared to 2008, 2007 was supposed to be a good year. Well, not so much.

A full scan of six decades of this data show only one dropoff like this, in 2001, when newspapers were hit by the triple-whammy of the bursting of the Internet bubble (bad for ads, especially employment classifieds), the resulting stock market plunge, and 9/11. Eventually, the business recovered a bit. This time, though, that ain't going to happen.

Good news, sort of: Newspaper online revenue went up almost 19 percent. But that was off from (admittedly unsustainable) 31 percent increases each of the previous two years, and of course, online revenue is still a drop in the bucket (7.5 percent of total revenue).

Hang on, folks. The ride gets even bumpier from here.

Help Wanted: Classifieds

Steve Outing, one of the best newspaper/online thinkers and pundits around, is involved with a new endeavor called ReinventingClassifieds.com. The name says it all. He's conducting a survey about newspaper executives' attitudes about classifieds and their future--if you've got a couple minutes, please go help him out by answering a few thought-provoking questions. Thanks!

Losing Local

If this remarkable statistic has been publicized, I somehow missed it, but there's a doozy in the Wall Street Journal today (subscription required; see Question 7 in the quiz):

Last year, for the first time, local advertisers spent more on sites like Google.com or Monster.com than on local newspapers' sites. Internet companies got 44% of the $8.5 billion local advertisers spent online, newspaper companies got 33%, Yellow Pages sites got 10% and local-television sites got 9.3%, according to media research firm Borrell Associates.

Uh-oh. Obviously, the print local advertising business, while declining, still is much larger than that of any upstart competitor--for now. But newspapers are losing ground in the transition to online advertising among the local businesses that traditionally have been their bread and butter--the customers they must own, at all costs. It's not like the online companies have feet on the street going after those local advertisers--most of that business just comes in over the digital transom to Google, Monster, etc.

Lesson: Newspapers need better local online products to offer advertisers (and how), and need to be much smarter and more aggressive about how they sell them, i.e., not doing stupid bundling deals or sending print sales reps out to sell online or failing to understand that there are a lot of small local advertisers now searching for opportunities to spend money online and finding their local newspapers' offerings wanting.

The online ad business, especially locally, is really nothing like the print business, and newspapers need to grasp that, quickly, and adapt to survive. Self-service ads, telemarketing, contextual offerings--all of these are techniques that newspapers' online divisions need to move toward quickly to have a chance to win the local advertising arms race.

Failure to do so? Fatal. Absolutely fatal.

De-Classified

Looks like we're seeing the first major Sam Zell-inspired move at the Chicago Tribune: The paper is dropping its daily help-wanted classifieds. Instead, the paper will publish "a listing of basic information in the business section every Tuesday" with a refer to the online jobs classifieds. Does this mean they figured out it cost more to print the classifieds than they were taking in? Wow.

In a possibly related development, The Washington Post's "Mega Jobs" classified section this past weekend was so thin that it probably would have better been titled "Nano Jobs."

More interesting Tribune news: The paper has expanded its ambitious TribLocal user-generated hyperlocal project to 21 suburbs, with a total of 35 planned by the end of the year.